Tax Benefits (SOI)

The tax benefits of participating in the RIC 457 plan differ depending on whether you elect for your deductions to be taken from your paycheck before or after taxes. 

Saver's Tax Credit

Did you know a nonrefundable tax credit known as the Saver's Credit may be available to low and middle-income savers who make contributions to eligible retirement savings plans? Explore the Saver's Credit to learn more.

Tax Benefits
 PretaxPost-tax Roth
ContributionsMade before state and federal tax withholdingMade after state and federal tax withholding. For more information see the Roth Summary.
Immediate benefitLower taxable income for the yearNone
Earnings (if any)Grow tax-deferredGrow tax-free
DistributionsTaxable as ordinary incomeTax-free if qualified

Qualified Roth Distribution

Earnings on after-tax Roth contributions are tax-free if the participant meets all 3 of these requirements:

  1. A distributable event has occurred
  2. Roth account is held 5+ years (from first 457 Roth contribution), and
  3. The participant is age 59½ or older, disabled, or deceased.

If one or more of these requirements are not met, it is considered a non-qualified Roth distribution and subject to taxation on the earnings portion of the distributed amount.